tv Bloomberg Markets Bloomberg November 12, 2015 10:00am-11:31am EST
betty: from bloomberg world headquarters here in new york, good morning. i am betty liu. here is what we are watching -- banks --of two central the fed going one way, the ecb the other. so, what does it all mean for the dollar as global policy black want walmart best' friday bargains? we will talk about the holiday strategy for the world's biggest retailer. he is still a knockout. oscar de la hoya used to win championship fights. now he promotes them. we will hear about the business of boxing. we are about a half hour into the trading session. i want to head to the markets desk where julie hyman has the latest. we are also watching oil inventories. julie: they will be coming out at 11:00 a.m. -- there is a lot
of commodity watching we are doing, and that is weighing on the major averages. of, a seeing, after, sort few days of wishy-washy trading, fluctuating in a tight range, we see more of a decisive direction, and that direction is lower. a lot of it does have to do with the commodity picture. take a look at my bloomberg terminal and the action we are saying. all 10 industry groups in the s&p 500 are down. a broad based selloffs. material stocks are doing the worst. financials in the mix as well. there is a commodities weight today. let's look at commodities. we see oil fall ahead of the inventories reported in an hour. usually, remember, it is on wednesday at 10:30 a.m.. it was pushed because of veterans day. it looks like gold futures have turned higher. they were trading lower. crude and copper are lower. get a little bit of economic data out of china --
its broadest member -- measure of new credit slumping to the lowest in 16 months. copper tends to be tied to what we see in china. how does this translate back to what? we see in stocks? --what we see in stocks? majors trading lower and free for pack more on taking a -- freeport mack brown taking a hit of 4%. betty: it looked like we would get this immediate selloff. julie: it is not happening. viacom was trading lower. it saw ad sales declining, and the paramount film studio was hit, as it did not have a hit that matched last year's transformers. shares are now higher by 10%. look at my bloomberg terminal. you can see where the shares have gone since we got the earnings this morning. let me brighten that for you. we had initial drop, and then the shares climbed. viacom did say it sees high
single-digit growth in 2016 domestic affiliate revenue. it also says improving domestic advertising growth this quarter will happen. that might be something that is happening. there is also liberty global -- or liberty media, excuse me, saying it will create tracking stocks for its sicilians, the latest in john malone -- sicilians, the latest in john malone's financial engineering. betty: thank you. let's check in with vonnie quinn in first word news. vonnie: we start with kurdish fighters in the battle to retake and islamic state stronghold. kurdish fighters are attacking singe are in northwest iraq. they every taken the mayor's office and part of a road used by militants as a supply line. -- round of talks on syrian civil resume saturday in vienna. russia is demoting a political transition that would last up to
18 months. according to a draft proposal obtained by bloomberg news, russia wants u.n. backing to carry out airstrikes against the islamic state. the u.s. and allies may oppose that. they say russian intervention is really aimed that propping up syria's president bashir al-assad. greek demonstrators broke away from the march in athens and through molotov cocktails for the parliament building. a 24-hour general strike is disrupting service. huge crowds are causing -- are protesting cutbacks. african leaders say the european union is going to far cutting migration. promised more development aid, but with a catch -- epic a has to agree to take that more people who illegally settle in europe. africa says europe should make it easier for people to live there. in china, people are warming up u.n. notes and will be kept warm by the old ones.
the old bills are being collected, shredded, pressed into bricks, and burned to produce electricity. that is a look at our first word news right now. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. i am vonnie quinn. betty: thank you so much, vonnie quinn, at the news desk. may,take yourself back to 1994, the last time the federal reserve diverged with europe. 21 years ago. way before the ecb existed. the fed's alan greenspan raise interest rates the same month as its main counterpart in europe ease monetary policy. fast forward, and a similar split is set to occur again, as investors predict december is when we will see the fed raised the key rate from near zero, and the ecb injects fresh monetary stimulus. so, what is going to happen this time around? i want to bring in london bureau
chief and chief international correspond, simon kennedy. we also have mike reagan. simon, let's start with you. mario draghi was making comments today to european parliament saying watch -- much of what we expect, which is that the ecb is likely to provide more stimulus, right? simon: absolutely -- dovish comments on the inflation outlook. reinforcing the forecast that mario draghi will institute some form of easing policy. mike, i was trying to take my self back to 1994. so long ago. i was just in diapers. just kidding. mike: [laughter] fedy: at that time, the raised rates and the bundesbank lowered their benchmark rate, the dollar rose. mike: it is interesting. equity markets took it in stride. it was a choppy year in the u.s..
we were down 9% from february to april. we ended the year higher than the rate increase that simon wrote about, and then came 1995 bubble took off from there. it is a distinct look back at that time. there were so many differences. obviously, the euro was not around. -- thethe difference is differences are interesting. wasnspan -- the increase half a percentage point. later in the a, he rose it by three quarters of a percentage point. by the beginning of 1995, greenspan had doubled the federal funds rate from 3% to 6%. betty: incredible. not what we are expecting now. mike: every meeting was a live meeting, and then he would bring it back down. there is the famous quote that he viewed it as sitting in a
bathtub, fiddling the hot and cold with his feet. it is during image, but it is interesting what wimps we have become when he was improving it at half a point, three quarters of a point at a time. betty: when you talk about someone that is bold right now -- mario draghi, i want to play what he played to parliament. guys, can we prevent? mr. draghi: price pressures, such as producer prices remained very subdued. signs of a sustained turnaround in core inflation have somewhat weakened. while theeconomy -- recovery will gradually strengthen the impulse underlining the inflation process, the protracted economic weakness of the past years continues to weigh on nominal wage growth, and this could moderate price pressures as we move forward. simon, if the ecb
does, in fact, in december add more stimulus or cut the deposit rate even further, what is the likely impact? what are the reverberations? simon: i think it is the opposite. the dollar goes up, the euro goes down. that would be the easiest trade. citigroup is looking at the divergence as well, and staying the same, a yield curve flattening in the u.s., and european stocks outpacing u.s. once. that would be the play mario draghi would be hoping for -- a weaker euro would help to boost his economy a little more, and augment what he is doing with monetary policy. betty: will there be, right away, again, speculation that there could be more stimulus, or is there a sense that -- because here we are talking about one and done, but what about for the ecb? simon: it depends, in part, what happens with the fed. isthe fed raises, as expected, there is some talk out there the ecb might hold off here i think that would be -- hold off.
the indications are they will do something. there are a series of things they can do -- drop the deposit rate, extend quantitative easing, when it is set to end in september, increase the amount of quantity easing. perhaps there is no need for policy changes next month. there is going to be a bit of a battle. ultimately, there will be something if mario draghi will follow through on his words. mike, there are several fed speakers -- we heard from a few of them -- janet yellen, jim bullard, who is not a voting member, saying look, we ought to be off of zero interest rate. i find it interesting that we have not budged from the fed fund futures saying that 70% of traders think there will be a rate rise. mike: right, in december. for ecb, right00%
-- by the way. mike: 70% is not 100%. interesting note from strategists -- they are contrarian, saying they are expecting reflation. they are not as worried about inflation as everyone else's. for the stock market, they are saying that is bullish for banks that benefit from the interest margin. they are looking at, potentially, a shift in sentiment away from the momentum companies like health care, consumers, and into the value stocks. financials being one of the best example of that, with some of the big banks trading below book value, really, rock-bottom valuations. so, obviously, there is a wide disparity of opinions. that, i think, is part of the reason why the market is just struggling here. we cannot hold that 2100-level. it is really a wait and see type of mentality. betty: we are down 150 points on the dow. mike, thank you.
mike reagan, our bloomberg columnist, and also, thank you, simon kennedy, over in london. much more ahead in the next hour of bloomberg markets. walmart is gearing up for the holiday season. we will unveil their black friday plan. get ready. buying a home you cannot afford -- how far should you be willing to stretch your budget? will it be the housing crisis all over again? we will be hearing from boxing legend oscar de la hoya. will he be taking ronda rousey under his wing, and what about another floyd mayweather fight? those stories and more coming up on bloomberg television. ♪
of the biggest business stories in the news right now. employers are holding the line when it comes to firing people. first claims for unappointed benefits were unchanged last week -- the total, two at 76,000. jobless claims have been hovering around a four-decade low since july. angie's list has a suitor -- iac interactive wants to buy the consumer review website. iac, which is chaired by barry zeller, owns match.com, and more than a dozen other sites. go public. going to he will not be scoring goals for the rangers, or sinking jumpers for the new york knicks, but a new madison square garden employee is getting a one-time hit of $40 million. it is to compensate for rewards he left behind at the agency he worked for for 20 years. you can always get more blue -- business news at bloomberg.com. i want to get back to the markets desk where julie hyman is checking out the retail
earnings we have seen. julie: after the bloodbath -- the macy's-induced blood wet -- bloodbath we saw yesterday. actually beat analyst estimates, so there have been concerns the slowdown would not be limited to macy's, that it was really about the data apartment store industry -- the department store industry or retail more broadly. s is reassuring investors. earlier, we have not seen a recovery. now we are seeing a little bit of one. a couple of analysts coming out and saying you should still by macy's shares today. jcpenney also slumped here the comedy is out with its full earnings report today. the company had, with same-store sales numbers that beat estimates. in a different kind of retail -- look at advanced auto parts -- huge decline in those shares today, the biggest in about three and a half years. the company saying that third -quarter profit trailed analyst
estimates, and also it is saying that its ceo is retiring. it has been under pressure from star for value. be appointing folks to the board and joining the board himself. there is obviously a lot of concern about the business here, after the company numbers missed analyst estimates. not justso seeing advanced auto parts, but autozone also falling on this news. betty: think you, julie hyman, at the markets desk. let's stay on the retails -- retail desk, the biggest one of all, and if you are hoping to scoop up online deals, he prepared for an early wake-up call. recordre expecting a turnout. we think the offers are great. the program is great. it is simple. we have great availability of product. one thing that disappoints customers at this time of year, they decide i want this tv, they go in, it is not there.
itemsght deep on the key and the differentiation is we have the inventory and stock to service customers. betty: shannon pettypiece covers walmart for bloomberg news. she is here with some details. a little different this time around. a lot of the merchandise will be online, is that right? shannon: yeah, they are making a big bet not just in-store, but online. a vast majority of the deals you can get online starting at 12:01 a.m. pacific time, fixing morning. set your alarm, buy online, go back to sleep, wake up, six thanksgiving dinner for your family. that is how it is supposed to work. they are putting a lot of deals online first, and then they will be offering them in the store at six a copy, thinks giving day, like they did last year -- on thanksgiving day, like they did last year. that is the strategy. it raises and adjusting strategy -- if you could get them online, why would you go into the store? betty: why? shannon: walmart still thinks
they will have record turnout in the store. they say there is a certain customer that still loves the black friday, you and-store -- in-store madness, i guess. they are expected a lot of people to come into the store, and the stores are stocked up with a lot of product or those that love the door-buster attitude. betty: my sister loves to do it. i do not get it. i do not want to be in the cold, in a sleeping bag, but you are right. steve talked about inventory. they are going to stock one million tvs, 15 million movies, and 10 million job sets. shannon: right. betty: did they run out last time? shannon: a big complaint people have had is you go there for the 50-inch tv that is $200, or whatever, and there are only four of them and they sell out right away. walmart is trying to get people into the stores, saying if there is a great deal, we're going to
make sure you get it. it is not a date and switch thing -- bait and switch thing. they plan to have a lot of these big deals. that means a lot of markdowns, money they are leaving on the table by offering these big discounts, but, of course, the hope is when you get people in the store, they buy more. maybe you lose some money on the tv, but they will pick up other items on the way. all of that is to get people in the store, guaranteeing they get the product they come for. wars, "staring of wars," right? that will be big. shannon pettypiece, thank you. the american dream is buying a home with the white picket fence, but are young professional stretching the dollar too far and buying houses they cannot afford? is it the housing nightmare all over again? that story is up next. ♪
betty: welcome back to bloomberg markets. i am betty liu. are you willing to stretch your budget when buying a new home? young professionals and millennials might be buying houses they cannot afford. patrick clark covers homes for bloomberg and has been writing about it. it is one of the most read on our terminal pads. everyone wants to own a home -- either you own a home or you want to own a home, right? what is going on. millennialeels --are stretching their budget? patrick: i am not sure. money, the home will pick up a smaller share of your income. you'll make more money, and the mortgage that was once eating up 35% of your monthly take-home or night pay is now going to take up a smaller amount. so, i wrote about some research that was highlighting, what is,
in some ways, a basic, but often forgotten personal-finance theme, which is your mortgage is going to become more affordable for you over time. right. the report highlighted different cities where it will become more affordable. cities: they looked at -- they looked at the difference between what 25-year-olds and 50-year-olds make, axel, 34-year-old, and 50 euros, reaching a wretch -- 50-year-olds, reaching a rough assessment of what they will make. betty: so, it will take six male -- six years in boston for the millennials, for the income, for the mortgage payment to be below 30% of the income. patrick: exactly. six years later, it will be below 30%. i have not looked at the underlying data, but what the julia economists told me is that
the city with more finance jobs, there tends to be a bigger jump in salary and the time you are in your 20's to the time you are in your 50's. in technology, san francisco, the bay area, there is less of evenjump, which may be an more dispiriting sign. betty: actually, didn't the trulia reports say forget about california, california is basically unaffordable? patrick: if you think you're going to live in california -- differences go, you had better make a lot of money. betty: if you think you are going to buy a home in san francisco and earn $150,000, you are crazy, unless you pool your cash together and buy one place. pat, thank you so much. intricate report. patrick clark of bloomberg. still ahead on bloomberg television, there is a big
word news. vonnie quinn has more from the newsroom. bonnie: we start with a warning from ecb president mario draghi. he says the likelihood of inflation returning to the , anded levels declines economic risks arising. democratic presidential candidate bernie sanders has gotten his largest union endorsement yet. the american postal workers union has decided to back the vermont senator. the union is 200,000 members. supreme court justice and teens and early the -- intime scalia is wondering if the court's diverse enough to reflect the country's principle, despite the presence of three women and one african-american male. he noted that four justices are from new york city, they are all either catholic or jewish, and online study law at yale or harvard.
a proposed smoking will would place the burden of enforcement on public housing agencies and could face resistance from tenants who do not want to give up control over what they can do in their apartments. president obama is selling something on ebay -- his new trade deal. an e-mail asks ebay members to support the transpacific partnership, helping them to connect with buyers in southeast asia. congress must still ratify the plan. that is a look at our first word news. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. i am vonnie quinn. betty: thank you so much. now, miguel cotto and canelo alvarez, they are getting ready to rumble. boxing fans cannot wait for the november 21 fight in vegas, the most anticipated fight since floyd mayweather took on manny pacquiao in may. that disappointed fans, right? it is also a showdown of the top
promoters, canelo alvarez, represented --miguel cotto represented by jay-z's company, and canelo alvarez are presented by oscar de la hoya. they promise this will live up to the fight. michael: people know this is a real fight -- stylistically, mr. de la hoya: people that this is a real fight, stylistically, guaranteed action. miguel cotto throws great punches, has a great chain. canelo alvarez , my guy, is a youngbull, a fighter just as strong. betty: he is 10 years younger. mr. de la hoya: he is 10 years younger, and this is one of those fights that cannot miss. people know that. manny pacquiao-mayweather generated 4 million pay-per-view homes at $100 a .
pop what we did here is/the -- slash the price in half. isty: michael, i know hbo promoting this heavily, but how can you get joe sixpack to pay even $50, $60 on pay-per-view? built up theave event as one of the biggest of the year, and one of the biggest promoters you, oscar, talking about the fight. betty: i hear he has a that with jay-z. michael, he does. that is another way we are penetrating the mainstream. was something we felt was important. both jay-z and oscar are passionate about their fighters, so they wanted to put something on the table. we have a company has a marketing campaign. we're talking about the fight as much as we can. the media is excited about the fight. it is not just for the hard-core
boxing fan. it is a huge event. in order to get to the numbers oscar and i believe we can get to, between 1 million and 2 million paper views, we need support from the mainstream, and we think the excitement of the fight will be attractive to a mainstream audience. oscar, there is talk that boxing, the new generation of fans are not as interested in boxing as they are in mixed martial arts, so the mna fighters are now really popular and maybe boxing is on the wane. ronda rousey on the cover of "ring magazine. that caused a stir. is this where you are headed -- do you want to start bringing mm a into your area betty: it is all -- area? mr. de la hoya: it is all about thinking outside of the boxed. the younger generation does not want to be told, for instance, what to watch. they want to think outside the
, sod, think differently what we are doing now is more of the social media initiative. betty: right. mr. de la hoya: and that is going to be a big boost for the fight. for interest, we are calling all our are -- all of our friends that have millions and millions of followers, whether it is on facebook, twitter, instagram. betty: and you see that with mma fighters. they are popular on social media. you want to promote ronda rousey? mr. de la hoya: my thing is, if she is ever convinced she can become world champion -- which i think she is, in boxing, then give me a call. i would be more than happy to promoter. she is amazing to she is incredible. the idea behind putting her on "ring" magazine was because she is starting to learn the boxing game. she does want to become world champion in boxing.
i know she has a contract with ufc, but the day she was to become a boxer, we are right here waiting for her. betty: you never know. mr. yormark: he is pre-selling. betty: exactly. he is first in line. go withoutt you guys asking about floyd mayweather, who says he is retired. he is 49-0. do you think he is really done? you know what you go through when you retire as a necklace. do you think he is done -- retire as an athlete. do you think he is done? mr. de la hoya: no. i think he is going to fight a few more times. they will wait until next year, maybe do the rematch with pacquiao, and that we will see what happens. betty: is it the money, or something else? mr. de la hoya: it is all business for mayweather. that is the difference with our fight. number 21st, our fight is about passion, the fans, giving the fans the best light possible.
that is what they will give you, a war, amazing, incredible. it is a business, but it is about the fight first. betty: when you say it is a business, what do you mean for him? mr. de la hoya: it is all money, low-risk, high reward. we are not naive here. we want to make money, but it is all about making sure the fans are happy. betty: and the hbo suggested retail price for the miguel cotto versus canelo alvarez 5999 -- $59.99. it all goes down november 21 in las vegas. so, watch out. all right, much more ahead on bloomberg markets. experimentalunded prosthesis might be the most advanced limb ever created. a fascinating story coming up. innovation in the world of nutritional health -- we will be goop, thethe head of
betty: welcome back. this is bloomberg markets. it is time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. volkswagen is telling employees that they can come forward with information about how the company cheated on emissions tests and will not be fired. applies to workers covered by the collective bargaining agreement. it expires november 30. in china, there is a sign that fixed interest -- six interest rate cuts in the last year have
not done much to increase borrowing. the broadest measure of new credit fell to its lowest level in 16 months. analysts say the problem there .s too much leverage apple is talking to banks about creating its own mobile to mobile pay system according to "the wall street journal." this system would allow users to send money directly to each other directly through their phone. it would be a rival to the pay paul -- paypal platform. you can always get more business news at bloomberg.com. time to get caught up on all the action around the world. i want to start in asia, where se we have heard a few already. nothing groundbreaking yet. we can see the hang seng was of about 2.4%. flat there in japan. in shanghai, the composite index down 0.5%. one big story of in the region, away from the volatility, one
region has been outperforming. south korea now dominating asian equity. julius our life reports from hong kong. presentthey are driving returns for korean shareholders. seven of the 10 best performance in asian equities this year are listed in south korea. they saw 968 and 699% respectively after clinching deals to sell lung cancer and diabetes treatment overseas. standout, share prices climbing more than 100% this year thanks to positive reviews for its air cushion foundation claim. another accolade to south korea, which topped the bloomberg innovation index this year. in hong kong, for bloomberg television, i am juliette saly. betty: let's head to london.
mark has the latest. druggie rebounded not last very long. this is a chance to use my pen here. that is when draghi started speaking. stocks rose. all the way down. similar story for the euro. the euro initially fell against the dollar. that was there. as you can see, it fell. ever since it has been rising, and now it is trading higher. he did not really say anything new. yes, he signaled that the ecb could boost stimulus in december as inflation wanes and economic progress worsens, but back in october, on october 22, when draghi for signal the ecb could boost in millis, since then, the euro has risen 5% against the dollar. the euro stoxx 50 has risen against the dollar as well. two-year bond deals have declined. we are watching draghi, janet yellen, it is a central banks day going forward.
betty: same here. i will see you in a little bit for the european close. for a look at the u.s. markets, i want to head over to bloomberg's abigail doolittle live from the nasdaq, looking at media stocks. we were talking at -- about viacom in their earnings. abigail: their report this morning was disappointing. they missed estimates on the top and bottom line. sales at paramount were down 24% year over year. u.s. domestic advertising sales were down 7%. however, the street had been looking for a decline of 9% on those u.s. ad sales driven by week tv ratings. perhaps it is that beat causing the stock to go higher, along with the ceo's focus on growth in china, a return to 15 films for paramount in 2016, and domestic advertising sales accelerating the fiscal year. perhaps this is enough to turn around the stock. it has been a tough year with shares now 33 -- 36% year to
date. talking to a small that during to a small copy with a big cap, angie's list. a merger would put the consumer review site with iac home advisor. the street likes it. pacific crest put out a deal saying "a deal they should not refuse." , withre likely to agree cs capital encouraging angeles to sell in a letter with the president saying angie's list is "running thin." shows it is down 70% since the july, 313 pete. he has a point. -- july, 2013 peak. he has a point. betty: abigail doolittle at the news desk -- at the nasdaq. ," have a special edition of -- bloomberg businessweek,
looking at our crystal ball. we focus on the advances of health and science. -funded experience prosthesis might be the most advanced ever created, attached to a skeleton via a bone implant. >> used to be a salesman, and in 2005, i was diagnosed with having cancer in my left forearm. it was so aggressive, it would not slow down. in 2008, the educated the arm just above the elbow. david gura i got a second chance at life. -- i got a second chance of life. you not think that meets me happy and give me that much more of a drive -- yes, it does. >> ready and go.
hold it. hold it and relax. john has become something of a guinea pig for experimental prosthetics. >> hand open. >> here at the johns hopkins applied physics laboratory, a glimpse of how physics and machines interact. a mind-controlled arm that attaches directly to his skeleton, and it is the result of a decade of work, and $120 million of military funding. >> so, this is the first time that we are attaching a implantic device to an that poor truth his skin and allows the prosthesis to actually be physically attached to his skeleton. john: i had a problem with all of the arms i was working with. i was having skin breakdowns. you do not have to worry about
section on the stump. it connects directly to the implant. therefore, you can continue wearing it no matter what. chris johnny's -- >> johnny's implant allows for more flexibility, but he can control it with his thoughts. for this, he had to go through surgery to rearrange the nerves in his missing arm. >> we will start with the movement. ready? we are actually witnessing something that has never been done before. johnny really controlling the limb, something by thinking about it with normal, intuitive thought. we are using wireless bands to transmit that muscle activity. now when he thinks about moving his missing limb, it now contracts. moran: elbow flexion, wrist
rotated, ready, and go. and go. and go. johnny: it is hard. i have done hundreds of thousands of hours of mental exercises, just trying to do the different grips, bends, rotations. right after the surgery, if they think they can step right back rudeit, you are in for a awakening. it takes a lot of time. do you want to hand that to me? >> getting johnny to connecticut with the arm is half the challenge. the ultimate goal is for the arm to talk back to johnny. soon, he will feel how hard or soft something is, understand the texture, and even the capture. johnny seesforward, a future were robotics are a tool we use -- though from being a tool used to part of us. be as nearanted to
natural as a human arm as possible. do you trust me? : yes.ran t ofy: i am like the model cars, the wright brothers airplanes. the beginning. as we progress, we will move up to the maseratis or the super-sonic jets. back to the future has begun. betty: that was a look into the future of health and science. what else will we see in 2016? still ahead on bloomberg markets, you may know gwyneth paltrow best as an oscar-winning actress, but now she is expanding her phil: break --goop brand into another direction and more on that when we talk to the ceo of goop, her business partner, after the break. ♪
television. i am betty liu. gwyneth paltrow is getting into the book business. goop press, named after the oscar-winner's lifestyle website, will launch in april after the provocation of a new cookbook and a book about beauty that will follow in 2016. talk about that and more innovation is goop ceo, lisa gersh. you have been on the job for a little over a year. i have to say, this is the age of the celebrity brand, right, and the brand being big business, so why go into books right now? ms. gersh: well, goop was an obvious extension for us. when paltrow has two best-selling books. there is another in april. hopefully will be another bestseller. we do a lot of content with a lot of well-respected experts in many different areas. this is a way to create and allow us to have even deeper content. our content is deep.
so, we want to have that opportunity to really expand it. betty: right. you and i were talking off-line about this in the commercial break. there are a lot of celebrities with brands. you have reese witherspoon, jessica alba, of course, ellen degeneres, and others. is there any sense of competition here, or do you work together? -- gersh: we do actually gwenyth is friends with reese and jessica. they share advice. i am good friends with the ceo. we share advice, even share a nanny. betty: [laughter] brands,h: whether it is celebrity brand, cable television brand, it is a set of values, and you have to go around those values. once you create the brand, you have the opportunity to create a great as is and you can do things like look -- booking
prince, things that we do with the brand. the digital age has made it easier to build those brands than ever before, and it is easier to get attention because of social media, but you still have to have a important set of values for it to make sense. betty: i know the values is very important. i believe you and gwenyth were on stage at a company event not too long ago, and actually, you faced some of the tougher questions about the criticism of goop, and you said, actual, it might help, in a way, because of attention comes out with a $1200 sweater, or her holiday gift guide and people get snarky on social media, doesn't that actually, in a way help? ms. gersh: i think the interesting thing about goop is people care what we have to say. sometimes they like what we have to say, sometimes they do not like, but for the most part, they like what we have to say. we have almost 50 million people opening the newsletter every week. i think that means they like what they say -- what we say.
we have our guide. betty: anything crazy on it? ms. gersh: of course. we have even put in a section called ridiculous, but awesome. betty: you have a favorite? ms. gersh: i am thinking about signing up for a trip to outer space. -cut or im truffle it's that in, and that is $40. betty: that is a bit more reasonable, lisa. more for the p release great to see you. the ceo of goop. much more ahead on bloomberg television. here comes a hike -- a fed rate hike. we will look at how investors should be bracing for the first interest rate increase since 2006 -- almost a decade. ♪
from bloomberg world headquarters in new york, i am betty liu. here is what we're watching. banksn the fast lane, love the new highway bill and it has nothing to do with driving over the speed limit. off, stocks lift falling as investors brace for the fed to raise interest rates are the first time in almost a decade. mario draghi rocked the european markets, warning there are risks to recovery. we will have the european close in 30 minutes. let's go now to julie hyman for some breaking news. julie: it is a big build in those inventories. it looks like gasoline inventories fell.
we saw a little bit of an increase in distillate inventories at 352,000. report isike this worse than had been estimated, particularly on crude oil and gasoline. if you look at how oil prices are reacting, we are actually seeing a little bit of a leg up in oil. there was at least one trade that was up but now i am seeing a decline of about 1.7% in those oil prices. they have been declining, in their lowest at about two months time. this report is not going to help matters when it comes to the trading in the oil market in terms of any kind of recovery. i am just trying to check and see when is the last time we had inventories as high as this .evel, 4.2 million barrels it looks like it is the highest in about a month. betty: it is going to continue
to put pressure on the oil prices but also the commodity-related stocks. julie: one of the reasons we are seeing a philip in stocks overall. we are seeing declines in the bond market. somehave mitigated to extent, particularly on the nasdaq which is down about 2/10 of 1%. if you look at the declines within oil, stocks like marathon and williams. williams is still seeing declines. it is not just limited to oil prices. gold has been continuing to take a hit, down another half a percent or so, and gold is trading at a five-year low. part of that coming back to the fed, the perception the fed could indeed be raising rates in december. we are seeing a little bit of a decline in yields today. we heard james bullard say that the central bank should raise
rates from near zero. we heard from charles evans as well, saying the fed needs to be very clear in communicating that it is going to be a gradual pace increase. you have to throw all of that into the mix today. betty: thank you so much, julie hyman at the markets desk. with courtney donohoe from our news desk. courtney: a closer look at a now -- iraq, they say they control highway. kurtz launched a major assault and are being backed by us-led air attacks. will present the medal of honor to a retired army captain who tackled a suicide bomber in iran.
he was critically wounded when the bomb exploded but he has learned to walk again after 33 operations. it is a key endorsement for democratic presidential candidate bernie sanders, the american postal workers union of -- union has decided to back the senator. traders broke away from the march today in athens and through molotov cocktails toward the parliament building. a 24 hour general stake -- strike is disrupting services. big is the gender pay gap in the u.k.? way, he cameron has his is proposing new rules that would affect government agencies and companies with more than 250 employees. they would have to publicize data on the differences between average pay in male and female employees.
that is a look at our first word news this morning. you can get more on the stories at the new bloomberg.com. from the bloomberg first were desk, i am courtney donohoe. betty: investors are bracing for that first rise in interest rates since 2006. stocks are taking a hit, following comments from that officials reinforcing the first move may, as soon as next month. how should investors position themselves? to bring in heidi richardson with black rock. from looking at a story charlie evans saying, when we raise interest rates, we have to tell the market that it is going to be gradual. do you get the sense that fed officials are watching what is going on and know there are a lot of jitters? heidi: right.
i think most are anticipating a rise in december. betty: how come we have not priced this in? heidi: when we look at what happened with nonfarm payrolls, it really changed the game in thinking the fed was going to raise in december. the market is selling off today but there are winners and losers in every market environment, and i think if the fed does raise interest rates, cyclical areas of the marketplace are poised to gain. itty: thinking about tech, believe we have a chart showing one tech etf and how it outperformed the s&p, double returns. heidi: this is just the earnings release. the s&p was up about 4%. betty: why is that? in a higher interest rate environment, why is that?
heidi: in the technology sector, those areas are flush with cash. those defensive areas are loaded up with debt. tech is left vulnerable to any rise in interest rate so they can continue with their shareholder friendly policies, increasing dividends. in times when things are drying up, cash is king. betty: what about the banks? is it inevitable that the banks could benefit from this, just given the better margins? heidi: i think financials are another area that will benefit. the banks will increase their cost of borrowing but not necessarily an equivalent increase in terms of the number of depositors. betty: is it going to be that much? heidi: i think it is the market perspective but the cyclical areas of the marketplace are poised to have better
opportunities than what we see in the defensive. if we think about the fed policy, they have been stating they are going to be very gradual so it is really what is next after that 25 basis points. i do not think we will see a staircase like we have in the havingith every meeting a raise. betty: you mentioned that staircase pattern, that is what we have been talking about all morning long, about what happened in 1994 when the fed began raising interest rates and mode.b was at an easing mike reagan was pointing out, we were raising by 50 basis points and more at that time. have we lost a little perspective? heidi: they have been saying they are just going to be looking at particular measures of the economy, looking at wages and unemployment, so they will be very deliberate in terms of the increased. it is not going to be as
reactionary as some of the past cycles, every meeting 25 or 50 basis points. betty: what is your forecast? heidi: i think if we looked out over the next 12 months i think we could see 75 basis points, 100 points over the next 12 months. you mentioned the losers, i know you talked about some of the defensive areas of the market, but when we say "losers," are we talking really big losers? heidi: i am just talking about some areas that are really loaded up with debt like securities and telecoms. they have gotten pretty expensive over the last couple of years as investors search for dividend yields. betty: before we go, we have got to talk about europe. what about the opportunity there? heidi: i think equities are poised for improvement in europe so if we think about the interest rate environment, the
rates market is pricing in about a 10 basis points decline after 'suggie's comments -- graghi comments today. the european equities are benefiting from the tailwind and you are getting a dividend yield on average from 3% to three and a half percent so i think you see people embracing the idea of searching for income and going into equities. betty: heidi, thank you so much. heidi richardson of blackrock. much more ahead in the next half hour of bloomberg markets. with betterpe out than expected fourth-quarter results. the ceo had some advice for the fed. belowre shares following a pound for the first time in months. copper, that is the culprit, sticking to a six-year low.
they can come forward with information on how the company cheated on emissions tests and not be fired. 30.xpires on november up to 11 million vehicles were involved in the emissions scandal -- emissions scandal. 85% in theising, up nation's capital me areas. median price for a single-family home is $229,000, up five and a half percent. chipotle says all of its restaurants that were closed due to contamination will be back in business today. outlets in the pacific northwest were affected by the e. coli outbreak. at least one dozen people were hospitalized. you can always get more business news at bloomberg.com. let's head back to our markets desk were julie hyman has a check on some of the company movers. julie: starting with the payments space.
apple could be developing a competitor to paypal. it would be a mobile to mobile personal payment service, and apple is just a little bit higher. gene munster saying it does not significantly affect his model but obviously investors are concerned about the effect it would have on paypal. i have alphabets appear as well because btig analyst mark palmer has said that an ability to gain traction in payments might cause it to bid for paypal. solar, sun edison slumped sharply. the company is falling again today, although it is coming up off the lows of the session earlier. out of the gate it was down as much as 17%. not clear why it has recovered, but axiom capital, gordon johnson who then he spoke with
recently is coming down with a downgrade of the shares. his price target on the stock is only two dollars. sun power is out with some preliminary numbers. it is an increase over its prior forecast. they are holding an analyst day today. when we talk about sun edison and that decreases it has seen recently, it has high hedge fund ownership. you will see the top shareholder with 7.8% is greenlight capital. at least as of the last filing at the end of june. we are -- we will see if there are any chance of just changes. holder innother top the hedge fund industry. list, a look at angie's the company is climbing 12% after iac interactive offer to buy it for $8.75 a share in
cash. the shares rising above that level. iac seeing little change. yelp is gaining on some speculation that maybe there are some buyers. putting itselfut on sale and then put the process on hold. betty: julie, thank you so much. in washington, the newly appointed speaker of the house paul ryan has pledged ins will be done differently under his watch. he touted last week plus house -- he touted last week's house passage of the highway bill. perhaps the biggest victors where the banks to keep fed dividends from becoming a funding source on the bill. how were they able to pull it off? phil mattingly explains. page this year's 1000 plus
highway bill contains an on-ramp to something magical in washington, 17 billion dollars in government revenue that does not require raising taxes. contains aation provision that would snag a major windfall. >> it is fundamentally unfair to have one industry sector pay for a specific piece of government infrastructure. phil: what is a company to do? allow wall street to demonstrate. step one, lay the groundwork. it lawmakers with a joint letter of opposition from the industry's most powerful trade groups who represent everyone from j morgan to the tiny community breaks -- banks. it all the way up leader mitchority mcconnell only to be rejected. hilltwo, flood capital offices and arm them with very
specific talking points. step three, secure the lawmaker letter. letter, has efforts buttressed by a robust lobbying the signaturesf of a bipartisan group of 150 lawmakers. step four, spread the word in a bipartisan op-ed circulated throughout capitol hill. ideologicalf the spectrum echoing the concerns. step five, make it official. the groundwork is delayed but stripping the language entirely is out. enter the compromise language. late on a friday night, they introduced an amendment to prove -- replace the problematic amendment with another funding source. step six, take it to the floor. supportive lawmakers make the final pitch, then the vote and
victory. well, for now at least. the house and senate have reconcile different versions of the bill and that means even more work. hats problematic for the banking industry, congress has identified this as a very real source of cash. >> should it come up again, we will reengage on this issue. to make sure we can shoot it down. banks,ad news for the great news for the lobbyists they employ. betty: i want to bring in phil mattingly on this. if there are winners here, there is going to be a loser and i believe the loser is the fed because now they are on the hook to finance these dividends. phil: that is right. the compromise language was letting the banks off the hook but forcing the fed to pay for this.
they decided to force the federal reserve to liquidate their surplus account to pay for the $17 billion and a lot more that was replaced in this bill. that is a problem. you have stanley fischer coming out saying, this is dangerous. you have fed spokespeople saying this sets a dangerous precedent. blog,rnanke taking to his talking about what a dangerous precedent this sets, calling it budgetary sleight of hand. this underscores what is happening on capitol hill. you have to find a funding mechanism for these past legislations. betty: for the banks themselves, this is a win for them, but what really is the bottom line to their bottom line? phil: the impact would have been real. this would have applied to the dividends given out to banks with $1 million -- $1 billion in assets and more. that would cut into about 4% of
the industry's revenue. total, this would have raised $17 billion over a ten-year period. the fed paid out more than $1.7 million in dividends so this had a real bottom line impact. betty: thank you so much, phil mattingly of bloomberg politics on the highway spending bill. still ahead on bloomberg television, earning lows dragging stocks lower in europe. we are going to discuss the losses in the european close coming up. ♪
we are moments away from the european close. mark barton joining me from london as we drill down into some of the more important news. has been embroiling the european markets today. mark: i would love to say he came, he saw, he conquered. the markets rebounded. how many fed officials are going to speak today? it is six. betty: it is five, i believe. mark: what is the take away from those five? betty: they are going to try to say as little as possible. draghi did not add much to what he said about a week ago. he signaled there could be more stimulus in december but that sends a bit of shivers through our sign -- our spines.
we will be asking that question to our big guest. i have got to tell you about one stock today, rolls-royce, 20% decline. this is britain's industrial powerhouse that lost 1/5 of its value. it is not every day you see a stock declined by 20%. when are you going to declare a winner in battle of the charts? betty: you took it right out of my mouth. i will do it today so you better get ready. mark: it is coming up, european markets, the close. that is next. ♪
mark, what do you have in store? mark: not even mario draghi could stop the biggest drop in equities in six weeks. the european close starts right now. betty: we are going to take you from new york to london to berlin in the next half hour. we are going global as we do here. mark kicks things off. mark: you better believe it. spoke, and the biggest decline in six weeks. since october 22 when he first said he would press the stimulus in december, the stoxx 600 has risen by 300%. we are playing a waiting game until december the third. it is not all about